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Apple publishes data about its “retail segment” which ifoAppleStore.com catalogs. Here are some statistics I was able to compute from the data:

The stores generate over $100k per employee per quarter. In 2010, revenue was $481,000 per employee. This year the average is around $320k excluding the fourth quarter. In 2009 the average revenue for the technology sector was $388k/yr. A retailer like JC Penney generates about $124k of revenue per year per employee.

The revenue per visit is around $45. There are well over 250 million visits per year (222 million for first three quarters of 2011).

The combination of these two metrics are shown in the following chart:

The number of employees has grown in proportion to the number of visits. There is one employee for every 2,500 visits/quarter. The following chart shows the relationship between retail personnel and store visitors on a quarterly basis.

Assuming an employee works for 360 hours per quarter, the average employee sees 6 visitors per hour or one every 10 minutes.

As that visitor generates more than $45 of revenue, an Apple store employee creates sales at the rate of about $278/hour.

Armed with this info, Apple employees can say they are grossly underpaid considering they’re making Apple that much more money. Of course, it’s better to have a job where you’re underpaid than have no job at all.

http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

That’s a great attitude for you. Why not just pay the whole nation minimum and give everyone a job. After all they should be thankful for getting minimum wage, know that they won’t be able to afford basic living, rather than being unemployed.

Lunaticraving

I think you missed the point, he’s saying they are under paid according to this information.

However, ‘retail revenue’ is gross, net is going to be a lot lower once you subtract the cost of running the store (extremely expensive in Apple’s case), management overhead, cost of the product(s) sold, etc.

Net revenue (ie, profit) per employee will be much lower, and while I have no inside information to base it on I’d estimate it to be about 1/10th of the retail revenue.

An employee generating net sales of $45K per year and getting paid $35K per year can’t be considered “grossly underpaid”.

http://www.asymco.com Horace Dediu

There is data on profitability but I did not publish it because I want to understand the way it’s calculated first. What it does show is about $120k/yr/employee. All this information is easily calculated from the tables posted under the first link of the post (ifoapplestore.com). It’s updated by Apple every quarter.

http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

Yes he did say they are underpaid according to this information. But he also said they should be thankful they are underpaid instead of being unemployed.

It was the 2nd point to which I was making my reply.

Fake Tim Cook

It works in China.

Anonymous

Productivity is how efficient you are – how does this chart show this? You are again conflating sales as meaning productivity when it is not. What about changes in price? Different product mixes etc. These all effect price but not efficiency which is what productivity is about.

What is the change in marginal productivity?

If I sell 1 tem today at $1 and one item next year at $1.10 using your logic I have increased productivity when in fact I have not I have still sold one item.

http://ximagin.co/thecw/ The CW

If a company is interested in producing revenue then the only metric that matters is the one Horace has delivered: revenue per employee.

http://www.asymco.com Horace Dediu

There is no chart that shows productivity. If there was I would have labeled it that way.

Anonymous

Then why the title? It’s misleading.

http://twitter.com/natouno Nathan Uno

“Productivity”, in a general sense, is a relative measure of input to output. I think there’s a case to be made that the ratio of employees (input) to revenue generated (output) is one type of productivity measure.

For example, this measure could be used to measure saturation – at some point raising the number of employees (increasing inputs) doesn’t impact the revenue generated (no increase in output). At that point the employees could be considered “less productive” in the sense that they’re generating less revenue per employee.

So I’m not sure the title or analysis is misleading. I think it’s more accurate to say that the analysis is of limited value – it only allows a very narrow set of conclusions to be drawn. It doesn’t provide a complete picture of the productivity of the stores or company overall, nor do I think it’s intended to do so.

Anonymous

There is no general sense its simply outputs/inputs. If your input is empoyees and your ouput is revenue then if I raise prices by 2% then in your calculation productivity has increased when in fact if I have sold the same amount it hasn’t.

I agree the analysis is of limited value but I disagree because it is misleading.

Tatil

You are defining outputs as number of sales, not the the revenue. That is quite arbitrary. Besides, if your workforce is now able to make the same number of sales at an even higher price point, maybe they got better at being salespeople.

kevin

If my employees can now sell the same amount of goods but higher-priced such that revenue has grown relative to last year, they are more productive. They have “convinced” customers to pay more.

The important output metric is revenue, regardless of whether it results from selling more goods or selling higher-priced goods.

Productivity is commonly defined as a ratio of a volume measure of output to a volume measure of input use. While there is no disagreement on this general notionIt is that clear but what you are arguing is not productivity.

Greenfunnyguy2164

Apple treats its employees poorly much like Walmart and the other big offenders out there. The difference for the most part is they actually have to do something and do it well. Employees are smart, well educated and generally great people. Of course management is poor at best and this is a major issue but that is nothing new.

No other retail has the amount of traffic Apple has and this cannot be an easy job. Expectations are high, compensation is low. There are many who do into the million, multiple millions in sales and make less than 35K a year. Some of which are in big cities where this would be at the poverty line basically (not the real one but what’s 35K in NYC or any where in California?). So yes productivity is high and in some store really high!Apple is taking advantage of the young, the underemployed and is creating a lemming like internal society that not only takes advantage of their employees. Of course is this bad economy this a very easy thing to do. It will come around to haunt them as their reputation will get worse over time and someday things will change. The economy will get better one day and will even be a great economy. Things will change and Apple stellar reputations will not be that what is once was. Who wants to work at Walmart or Apple for that matter?

http://www.asymco.com Horace Dediu

Does management get rewarded for being poor or is being a bad manager a requirement for the job?

Fake Tim Cook

Apple has over 300 stores. I’m certain there are some that are not as well managed but in general Apple attracts and trains the best retail management around.

Anonymous

You know, it’s awfully tiresome seeing Apple singled out from a vast crowd of companies with similar or even worse characteristics, whether it’s about employee compensation or foreign factories or whatever. My wife is an ex-employee of Apple, so I can talk a bit about the employee issue. What are your qualifications? What do you personally know about the life of an Apple Store employee?

The reality is that Apple pays a decent wage in today’s world and touches all the bases, including health plans. They probably have 401k plans where they do 100% matching, at least they used to. They abide by all the safety and environmental rules.

And yet you stand ready to castigate them because they don’t pay over the prevailing wage. Look, Apple didn’t create this crappy economy. Indeed, they’ve done more than their fair share to help rescue it. And there’s no doubt that if talented people can find a better job, they’ll either take it or Apple will give them sufficient inducement to stay put. It has ever been thus.

I suggest that if you are so interested in placing blame for the wretched state of the economy, you do a little homework and find out who the real villains are. I’ll give you a hint: They support the Republican Party.

http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

“The reality is that Apple pays a decent wage in today’s world ….”

If you think $9 to $15 an hour is a decent wage (assuming retail wages of course) then I disagree. That wage is not even considered livable in today’s economy.

“Look, Apple didn’t create this crappy economy. Indeed, they’ve done more than their fair share to help rescue it.”

How is sending all your manufacturing operations to China & Brazil rescuing the American economy. Seems they’re doing a good job of helping their economy. If Apple decides one day to start bringing their manufacturing back here then yes I will agree with you.

jawbroken

It’s very nationalist of you to solely consider american jobs and the american economy.

http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

Yes I am nationalistic and I’m proud of it.

jawbroken

You may as well tell me you’re a proud neo-nazi, to be honest. I’ll feel the same way about you.

Anonymous

To say that Apple “sent” manufacturing to China and Brazil implies that it was once located elsewhere. The vast majority of Apple’s product manufacturing did not exist a few years ago. Anywhere. The company did not lay off thousands of highly compensated union workers to save money with Asian manufacturing. They are not a rust belt business, abandoning roots in the heartland to chase a buck. Any manufacturing job, retail job, design job, management job, etc. is a net gain. And besides, Apple has added thousands of new white collar jobs in the past few years that pay very well.

Guest

Where are you getting your conclusions that the employees are treated “poorly”, or that management is “poor at best”?

Does Apple Stores have an inordinate amount of labor violations, employment investigations and employee lawsuits compared to anyone else?

Considering the out-sized profits and traffic Apple generates, I would think their management is quite good.

I would note that most relationships, or even all of life on this planet, can be viewed in terms of exploitation. It is a useful filter for examining relationships. But if you’re going to do it, don’t do it half way — do it globally. The “those on top exploit, those not on top are poor victims” is too simple and misleading.

Walt French

“Of course management is poor at best…”

Absolutely. Gawdawful management is the ONLY way you can build a retail operation from nothing and go to a very high revenue/employee while leaving customers highly satisfied and your stores the envy of all your competitors and other retailers.

All those metrics show hideously bad management. No wonder Johnson had to leave with his tail between his legs to some ratty little $18 billion company.

Thanks for making the quality of your insights so clear, greenfunnyguy2164!

Anonymous

The goal of management, always, is to maximize profit without cutting legal or ethical corners. Toward that end, Apple has the best retail management in the world.

Employee satisfaction and fair treatment are esoteric concepts, and mean different things to different people. In what way does Apple “treat its employees poorly?” Are they mean to their poor underling employees? Do they force the plebeian workers to use a time clock? Are the 401(k) matches smaller than the workforce would like? Does the typical part-time Apple retail worker make less than the typical nuclear physicist? We need concrete metrics to determine treatment; anything less is just hot air. The company is not a co-op, and does not owe profit share to employees. It is a public corporation with fiduciary responsibility to generate profits for the benefit of shareholders.

Of course I’d like to see retail workers paid more in general. But keep in mind that most retail hourly work is unskilled. Significant training or education is not required. It offers tremendous flexibility for part time income, and in the case of Apple, stability for those who choose to work full time. There are ample opportunities for career building or advancement within the organization. Most retail managers start as retail associates, and the work is a meritocracy. Workers don’t assume any liability, and are not required to invest anything beyond the time they log. There is no requisite travel. I could go on, but you get the point.

Anonymous

Which planet are you from er Mr(?) Greenfunnyguy2164?
Every Apple employee I have met in London, various cities in the US, Europe and Asia seem to really enjoy their jobs. I’m told that the ratio of applicants to available positions is so high that disappointment is common. The Store Manager at the Regent Street branch in London told me that he found his job amazingly satisfying and loved the buzz between employees and visitors. Imagine that? Do you have such a thing as an imagination in your part of the universe.
Is there an Apple Store on your home planet?
It would be good to have some answers.
It might even be cool.

Anonymous

Interesting stats but there is another important side to the store story (!) with Apple, Horace.
Most retailers sell other people’s products and rely on those providers to market the goods.
For Apple, revenue levels are important enough as a useful metric, I imagine, but the stores are also there to fulfil the important function of marketing, visibility and support – all contributors to the company’s perceived superiority in engaging with their customers.
This is the only reason Microsoft and Android stores exist. These entities do not engage with end users since their customers are computer and handset manufacturers; and they want to be seen to be trying to do so. It is interesting to watch and observe how well these stores ‘engage’ with end-users who are not accustomed to dealing with these entities directly.
It is not easy to put a value on the goodwill value of Apple’s stores but they certainly add to the company’s market awareness, sales momentum and hence revenues imo.

http://twitter.com/bennomatic bennomatic

Interesting stuff. Out of curiosity, do you happen to know what margins are like in JCP-style retail establishments? I’d be interested in seeing a profit-per-retail-employee comparison between Apple retail and other companies, even other industries.

I’m thinking, beyond JCP, look lower to Walmart, then look up to, say Coach, and then across to other consumer/tech companies with retail like Sony and Microsoft. Does Dell still have storefronts?

http://profiles.google.com/larry.davis Larry Davis

I was thinking along the same lines. That revenue of $388k/yr compared to JC Penney at $124k/year is a large gap by itself. But when you figure Apple’s margins are likely significantly higher, the gap I suspect goes from 3x to more like 6x or more.

http://twitter.com/bennomatic bennomatic

Maybe, and maybe not.

Apple’s margins are pretty amazing, but that may be overall. It could be that margins at the retail locations are smaller than the average because of retail overhead. I’m sure that the 5th Avenue and Ginza stores are great for visibility and certainly bring in enough revenue to make them worthwhile to have even without the marketing benefits, but they can’t be cheap to run, even from a pure infrastructure standpoint. I’ll bet it cost them at least a million to replace the glass at 5th Ave earlier this year.

http://www.asymco.com Horace Dediu

I replied the following at another point in the discussion:

There is data on profitability but I did not publish it because I want to understand the way it’s calculated first. What it does show is about $120k/yr/employee. All this information is easily calculated from the tables posted under the first link of the post (ifoapplestore.com). It’s updated by Apple every quarter.
—

Retail margin is about 18% according to Apple.

me

They make more in sales per square foot than anyone else, too. That, along with being the most profitable company in tech, suggests they’re doing incredibly well.

Tatil

It is difficult to come up with a “fair” margin definition for some retailers. I don’t know how JC Penney works, but many big box retailers and supermarkets basically lease shelf space. They don’t really buy many of the products they are selling even with a 30-day payment delay. That gives them the right to return the unsold products and in some cases the suppliers themselves are responsible for stocking the shelves. I read that Walmart even opens whole aisles to bids, so that one company, let’s say P&G, would buy the responsibility of stocking the detergent shelves, determining which products are carried and which one gets which spot in that aisle. The margins may look small when you compare the cut the retailer takes and the cost of the product, but that is more like a commission for the retailer. (We don’t call real estate business low margin because they operate on a 3% commission.) In my mind, the margin should tie the cost of running a store and the commissions the retailer earns in that store.

http://twitter.com/bennomatic bennomatic

Interesting. I knew this was the case for grocery stores–you see Coke guys stocking the Coke display–but I didn’t know that was the case for things like clothing retailers. Right out of school, I got a job doing number crunching on sales for Mervyn’s, and the head of each department was called a “buyer”, so I assume they “buy”. I guess I was wrong! I’ll have to look into that.

http://www.asymco.com Horace Dediu

If you follow the link I put in the second paragraph you can dig into a lot of the margin of retailer question. They list both revenue and profit per employee for a large number of S&P 500 companies, including retailers like Walmart. (Apple is not in the retail category but in tech and I’m comparing Apple retail to dedicated retail and to tech.)

http://twitter.com/chrisferebee Chris Ferebee

The first chart is quite misleading. The line suggests a greatly exaggerated downward trend in revenue per employee, as only the first three quarters of 2011 are counted. Overlaying this downward-trending line on the bar chart of revenue per visitor exacerbates the problem, as the value for revenue/visit is not shifted by the incomplete data for 2011.

It would be fairer to show either (complete) fiscal years, or “average revenue per employee per quarter”, notwithstanding seasonal fluctuations.

Visitor from another planet

I agree that the 2011 stats don’t include the lucrative 4th Black Friday and Christmas quarter, and bias the $/visit statistic downward. I bet 2011 will prove to be a banner year for Apple and their employees.

http://www.asymco.com Horace Dediu

The 2011 stats are labeled as “first 3Q”. I will update the information once fourth quarter data is released. I suspect revenue per employee will improve but don’t forget that there are more employees during the fourth quarter so sales growth alone is not enough to cancel the decline. What you have to appreciate is that the definition of the Apple store employee’s job is not to sell stuff. There are no incentives for sales which makes these figures all the more interesting.

http://twitter.com/chrisferebee Chris Ferebee

Now you really have me confused.

Before I posted my comment above, I looked at the numbers on ifoAppleStore.com, and deduced that your “sales per employee” numbers correspond (more or less) to the sum, per calendar year, of the quarterly sales divided by the quarterly average number of employees.

By comparison with earlier years, I can’t see how the revenue per employee for calendar 2011 can possibly end up below $400k, and it could be significantly higher, considering the timing of the iPhone 4s introduction.

Hence my comment – it seems to me that the final line segment is misleading, in an Edward-Tufte-is-breathing-down-your-neck kind of way, suggesting a downward trend where none may exist. The final point of the chart is simply not on the same scale. (At the same time, the final bar is certainly valid, with caveat, in comparison to the other bars.)

Alanlindsaycbp

Two points. One really big and staring you in the face – why the HUGE drop in sales per employee from 2007 to to now. The absolute number means nothing for the future since by 2015 at the rate shown they will be BEHIND JC Penney.

Second – I have to support the productivity point. I don’t go to apple stores that often but when I do I get crap service and half the employees are standing around doing nothing. I freely admit this is a statistically insignificant sample, but it is real. Eventually I can navigate to the one or two employees who are doing all the work and who DO provide good service. I think the others are there just to avoid the appearance of a single big line waiting to be helped

me

two words: 4th quarter

(aka, Christmas — it hasn’t happened yet)

Anonymous

I’m not sure what may be going on with other Apple Stores but the stores I have been to in San Diego have all been helpful. I’m not a fan of the sort-of Appointment-Nazi viewpoint they have that makes it extremely difficult to stop by and get something checked out when you happen to have a spare moment but they make it clear (IMO) that you *have* to have an appointment, but when I go in to get something taken care of it gets taken care of. I do see a lot of people standing around as well, but it seems that they have more employees while most stores I’ve been to other than Apple are cutting back on employees. Most floor employees also don’t work full time. The “Geniuses” I’ve talked to have mainly been the ones that work at night after they’ve worked a full day some where else and just want to help people along with gaining a supplemental income in a tough economy.

I’ll admit, being an I.T. Manager for a private one-to-one Apple devices school I have gone in and been more knowledgable than the “Genius” who was helping me, but I expect that in a lot of areas of support where they just get whoever they can. More often then not, I do learn something from Apple Store Geniuses though.

I find comfort in knowing that when I walk into an Apple Store I will have no problem finding someone to help me whereas at the grocery store I am sometimes limited to getting the cashier to find someone for me.

I think that what Apple has done to ensure that they don’t have to cut back on staff is absolutely working for them.

I may be Captain Obvious here but I didn’t see anyone else mention this here. It seems the reason Apple and JC Penny are being compared here is everyone wants to see if Ron Johnson will be able to “duplicate” his success with Apple Retail environments at JC Penny http://www.nytimes.com/2011/06/15/business/economy/15shop.html

Unfortunately we’ll be hearing more and more of this sort of comparison because people expect Ron to create the Apple experience for JC Penny, instead creating a unique experience that proves to be phenomenally successful for JC Penny. Even without employees that all wear the same colored t-shirts or minimalist interior decorating…

http://www.asymco.com Horace Dediu

The only reason I used JC Penney is that I found data about them.

Anonymous

Then a happy coincidence it is…

Anonymous

Also, just wanted to clarify that I wasn’t intentionally passing judgement, just making an assumption and you know what they say about ASSumptions…

ANon

Please allow me to say that I do work for Apple Retail and I cannot disclose any further personal information out of fear of getting fired. When someone says working at Apple Retail sucks and management is bad, understand they are referring to the store management and maybe even regional management. Apple Retail imploded so quickly that instead of hiring the best of the best, they began hiring anyone who had enough experience. The managers at my store ARE incredibly rude to employees, they lie to customers faces to save their own asses, and worst of all most of them know very close to nothing about Apple products aside from how to make phone calls. The managers Apple is hiring within the stores do not know how to stand by their products. This is why apple is going to go broke again.

http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

It’s very hard to hire the best of the best at retail wages or in retail in general.

Anonymous

I am very sure if the managers behave the way you described them to be they would be fired like you to disclose information about Apple stores.

anon3

you have no idea.

It´s an incredible feat (of self-denial and or stubbornness) for so many employees to take the abuse BOH and still smile at every single customer.

http://www.facebook.com/people/Shameer-Mulji/1685212657 Shameer Mulji

That seems to be a problem with retail or any minimum wage job in general. For most people, those type of jobs are their first jobs and the last thing they want to do is screw it up. There are managers out there who know that & will take advantage of that. Not all managers are like that but there are more enough of them out there. And it’s a damn shame.

anon2

I second that (having been abused and bullied out of Apple by a manager). – I still like Apple and its products, but retail is a different beast altogether.

to add some inside info, the internal purchase price of all products in stock is roughly / on average 50% of the sales price (both before tax).

http://www.asymco.com Horace Dediu

That seems a bit high. If iPhone, iPad and accessories are a very large part of the mix, then I would believe it. They would however need to keep a low number of Macs in stock relative to iPhones.

lurker2

to add some more inside info, a medium sized store (70 employees) goes to roughly $1.2mln in rent, $1.2mln in wages, little in OpEx (such as new shirts, paper, toner etc etc) and easily 30mln in sales

i.e. $15mln in gross profit and $12mln in net profit before taxes

http://www.asymco.com Horace Dediu

Apple’s published numbers imply 107 Employees per store on average (Q3) and $10.7 million per store per quarter in revenues. The totals are probably skewed by the increasing number of flagship stores.

Anonymous

no they don’t! Your problem is that you have made the assumption that every employee that Apple reports is a full time one and this is simply not the case. You also have absolutely no reliable way of estimating the ration of part time to full time so the only thing you can say definitively is that Apple expects each employee to bring over $320 per per employee on average. Oh and just so you know, there is a huge difference between the employee structure of JC Penny and Apple. Apple has close to no supporting staff and something like 95% of the retail division are actual sales people. JC Penny … not so much. If you look at sales targets for JC Penny employees and Apple … they are very similar (although you won’t find any official sources).

No offence but your analysis is too narrow and ignores major factors in order for it to bring valuable insight. But then again no one can really create a factual piece on Apple’s retail business since most of the fact that really do matter are not public …

http://www.asymco.com Horace Dediu

I’ve been told that the numbers as reported by Apple are full time equivalent (FTE) so they do represent about 40 working hours per week. I still keep an estimate of 30 hours of customer-facing time to account for support staff, breaks, etc.
The measure of sales per employee is common in many industries and not just in retail. (see the link in the article: http://www.cnbc.com/id/30884783/)

Anonymous

I’m well aware of how common that measure is, yet it doesn’t make it any more useful. Sales per employee is a metric designed purely for sales force and at some point lazy analyst transitioned it to whole organizations. Measuring a organization’s performance for any reason purely based on revenues is borderline insane and also shows lack of operational management insight. You can compare organizations based on sales/revenue per employee only if the two organizations have a similar employee structure. For example, you can compare JC Pennny and Walmart but you cannot compare Apple and JC Penny. Apple is not a traditional retailer because they are also their own supplier in 99% of the sales.
So while your analysis of the revenues per employee might be correct and you have adjusted for part time employees, etc. your comparison with JC Penny and the usability of a general revenue per employee analysis of Apple is not that useful. You can’t really compare Apple with any other company because there is no other company that has a similar employee structure. Now if you can get an insight into the types of employees that Apple has an compare that to other retailers and combine it with revenues per employee now that would be something worth reading. But that’s just my 2c …

http://www.asymco.com Horace Dediu

The point of the post is not to compare Apple with any other retailer. The comparison to JC Penney is for calibration reasons, a kind of sanity check. If I removed that sentence from the post, it would not change what I’m trying to convey which is the relationship between employee count and visits/revenues. The novelty, if there is any, in the post is that we can estimate approximately the future headcount for the stores based on future expectations of sales. Previous analyses have usually compared performance on a per square foot basis rather than per employee basis.

Anonymous

Yeah I suppose the main point got lost since I read only what was reposted on another blog … my apologies as things such as assumptions and the actual comparison is all in YOUR post above.

Either way, do you think you might do a retailer profitability comparison at some point? Doesn’t have to be Apple but I would actually love to read something that explores what actually determines the profitability of a retailer and if there is any relation between HR structure and profitability? I can’t imagine that would be easy to do though plus you’d need a relatively long term view of the subject and the numbers might be somewhat sensitive in nature.

http://www.asymco.com Horace Dediu

I do intend to tackle the profitability question. I have the data but I’m not yet comfortable with my understanding of how Apple accounts for “profit” in their retail segment. Before I dig up the source definition I’m going to hold off on publishing.
If you follow the link to ifoapplestore.com you can see the source profit data and a footnote on how measurements changed.

At my local Apple Store the employees have always treated me well. I am sure they get a fair wage and benefits. I have worked in retail and there are both good and not so good managers as with any field you work in.

Unlike other companies, Apple’s retail has some stratigic aspects, as well as the so called “halo afect”. Hance, the numbers are incompleat and paint only portion of the real picture. Furthermore, with the new order online and pick up at the store, more labor and less revenue will be attribute to these metrics.
The article, to me, represent some idea of the retail side of Apple but brings to the fore the very unique model of ecosystem, which can’t view by its individual parts.

Euro has declined significantly against US dollar, how does this affect your EPS estimate?

http://www.asymco.com Horace Dediu

It doesn’t. If there is any impact it would be in the price of iPhones and that has not varied significantly for years.

http://twitter.com/zzbar Joe Zou

big chuck of AAPL’s sales comes from Euro region, its cost is mostly in dollar and dollar pegged currencies, and AAPL report EPS in dollar term, it got to have an impact as they can’t increase the ASP in the middle of the quarter, no?

http://www.asymco.com Horace Dediu

That is true but my point is that it’s also been true historically and it has not affected the price much. It may impact it by a few USD per phone but that’s not much as a percent of total ($650 or so). The reason is that the company probably hedges against currency volatility.

http://twitter.com/zzbar Joe Zou

thanks. today’s euro and aapl move had some analysts speculate about this. I think you are right that AAPL actively hedges currency risk when they gives guidance.